Industry speaks out on BSEE well control rules

The International Association of Drilling Contractors (IADC), along with seven other oil and gas industry trade associations, submitted a joint letter today to the Bureau of Safety and Environmental Enforcement (BSEE) with comments on the agency’s Proposed Blowout Preventer Systems and Well Control rule.

In April, BSEE proposed a new offshore drilling safety rule in response to the Deepwater Horizon incident that occurred five years ago. The proposed rule, 30 CFR Part 250, Oil and Gas and Sulphur Operations in the Outer Continental Shelf — Blowout Preventer Systems and Well Control, would focus on blowout preventer (BOP) requirements, including incorporation of industry standards and revising existing regulations.

BSEE called for industry comments in April on the proposed rule during the 60-day comment period to incorporate the feedback into the final rule. Today (17 July), the industry is speaking out.

IADC supplemented this letter with a separate letter, which specifically addresses the concerns of drilling contractors:

Specifically with regard to drilling contractors, IADC identified three major areas of concern with the proposed rule. These include its prescriptive requirements that go beyond international standards and will negatively affect the US market for MODUs; the significant costs to drilling contractors to comply with the rule, which were not accounted for in BSEE’s impact analysis; and the inspection and more massive BOP equipment requirements, which will negatively impact operations.

“At IADC, we welcome any opportunity to work collaboratively and constructively with BSEE and Director Salerno, as we believe in the need for better regulation. That is regulation that is fair, fit for purpose, practically implementable and affordable for our industry. We understand the weight of expectation on this proposed rule, given that well control is a key area of public concern, and we respect the direction of travel set by BSEE. However, the lengthy period of gestation of the rule is regrettably unmatched by the very short period for public comment on it, as the rule is both technical and wide-ranging,” said Stephen Colville, IADC president and CEO.

“Our industry has identified a number of measures that are variously technically unfeasible, with little overall benefit to safety standards and unrealistic deadlines, and the related costs of compliance are very high. IADC has identified areas where the duties of the drilling contractor need to be better defined in light of BSEE’s evolving view of the responsibilities and liabilities of entities other than the operator,” Mr. Colville continued. “Overall, the high cost imposed by the rule greatly exceeds the potential benefits derived from it, and will challenge the economics of outer continental shelf (OCS) operations. We know Admiral Salerno and BSEE share IADC’s concern to achieve the best possible outcome for safety in OCS well operations. So at IADC, we are confident that as BSEE and other key stakeholders come to recognize soon the shortcomings in the current proposed regulation, they will work urgently and collaboratively with the industry to rectify them.”

Randall Luthi, National Ocean Industries Association (NOIA) president, urged BSEE to continue discussions after joint trade comments were filed on BSSE’s Proposed Blowout Preventer Systems and Well Control Rule. Luthi expressed concern that areas of the proposed rule needed work and further input from industry experts.

“Left as is, the proposed rule will result in unintended negative consequences for current and future industry operations and for our nation’s economy and energy security. Additionally, the proposal will likely increase rather than reduce environmental and safety risk, just the opposite of BSEE’s intent.”

“As BSEE reviews the detailed technical and policy comments submitted by the joint trades, NOIA members stand ready to further engage with the agency as needed to provide expertise and information,” said Luthi. “Our goal is a final rule that is practical and implementable, strikes the right balance between prescriptive and performance-based requirements, and ensures safe offshore operations by reducing risk to the lowest level possible. This is a significant and extremely technically detailed rulemaking and it should not be rushed due to political time-frames.”

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